Why Management SaaS Platform SEMrush Shares Are Diving Tuesday

SEMrush Holdings, Inc. SEMR shares are trading lower after the company reported fourth-quarter FY23 results yesterday.

Revenue rose 21% Y/Y to $83.39 million, beating the consensus of $83.11 million. In the quarter, the company achieved an ARR of $337.1 million, up 23% Y/Y.

The company ended the quarter with over 1,041,000 registered free active customers (up nearly 30% Y/Y) and had about 108,000 paying customers (+12.5% Y/Y) as of December 31, 2023.

Dollar-based net revenue retention was 107% as of December 31, 2023, vs. 109% in the previous quarter.

EPS of $0.05 surpassed the consensus of $0.04.

The free cash flow stood at $8.9 million in the fourth quarter.

Brian Mulroy, CFO of SEMrush said, “Looking ahead to 2024, we are confident in our ability to grow and to continue to scale our business to capitalize on the market opportunity.”

Outlook: For the first quarter, the company expects revenue of $84.7 million-$85.3 million (around +20% Y/Y at mid-point) vs. consensus of $86.25 million and adjusted operating margin of roughly 8%.

For FY24, SEMrush projects revenue of $364 million-$368 million (up about 19% Y/Y at mid-point) vs. $368.81 million estimate and adjusted operating margin of 10% to 11%.

Also, the company anticipates a free cash flow margin of 7% to 8% in FY24.

Price Action: SEMR shares are down 18.8% at $10.55 on the last check Tuesday.